Have exchange-listed firms become less important for the economy?
Charles A. Dice Center Working Paper No. 2020-22
66 Pages Posted: 7 Oct 2020 Last revised: 22 Feb 2021
Date Written: January 26, 2021
The firms listed on the stock market in aggregate contribute less to total non-farm employment and GDP now than in the 1970s. A major reason for this development is the decline of manufacturing and the growth of the service economy as firms providing services are less likely to be listed on exchanges. A firm’s stock market capitalization is much less instructive about its employment now than in earlier years. Listed stock market superstars account for less employment than they did in the 1970s. Market capitalizations have not become systematically less informative about firms’ contribution to GDP.
Keywords: Stock market, value added, listing, market capitalization, employment
JEL Classification: G23, G32, E44, K22, L16
Suggested Citation: Suggested Citation